Economics, Econometrics and Finance
4 years ago

New method simplifies risk analysis for engineering investment projects.

FME Transaction
Use of the elasticity of net present value in risk analysis of engineering investments projects
Dragan Lj. Milanović, Radojica Dubonjić

Paper Summary

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The study explores a new way to estimate risks in engineering investment projects by using the elasticity of net present value. By calculating this coefficient, researchers can analyze project profitability and sensitivity to changes in variables like investment, returns, and discount rate. The findings suggest that this approach simplifies risk assessment and can be applied to real-world projects for better decision-making.